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July 21, 2010 - Phil Hodgen

Russian partner in U.S. partnership pays no U.S. income tax

Here is a recent Private Letter Ruling which parses the combined effect of U.S. tax law and the current income treaty between the United States and Russia.

A person in Russia is a partner in a U.S. partnership. It looks like a service partnership (accounting firm, law firm, etc.). The person did his/her work in Russia, not the United States. However, the partnership would distribute a share of partnership income to the person. Since it comes from a U.S. partnership, you’d think it is income that is taxable by the United States. Ordinarily that would be true.

However, the treaty between the United States and Russia is written in such a way that the person will collect partnership income from the United States without paying U.S.... continue reading

Foreign Business Activities in the USA Nonresidents with US Activities
July 19, 2010 - Phil Hodgen

FIRPTA withholding credit given even when the IRS didn’t get the money

In emailed advice released today on Tax Notes Today (2010 TNT 137-56 for you TNT fans) the IRS issued a rare written piece of information on FIRPTA withholding.

FIRPTA withholding

When a nonresident sells U.S. real estate, Uncle Sam wants to be sure to collect tax on the capital gain that the nonresident makes. This is achieved by forcing the buyer to withhold 10% of the purchase price. The buyer then gives that money to the IRS. The nonresident seller files a U.S. income tax return, and reports the capital gain and his/her/its actual tax liability. If the tax liability is less than the amount of tax withheld and remitted to the IRS, the nonresident seller gets a refund of the difference.... continue reading

Foreign Business Activities in the USA US Real Estate Investments
March 31, 2010 - Phil Hodgen

Overview from KPMG for inbound (to the US) business investment

Investment in the United States – A Guide for Foreign Companies [PDF] from KPMG/Canada.  If you need a satellite view of what it takes to expand your business to the United States, this is a decent start.

I’m writing an article for Business Law News on the topic.  Will be delivered to the editors today.  Aimed at business lawyers who are not tax specialists, let alone international tax specialists.  Mine is much shorter and much more modest in scope:  no “boil the ocean” for me. 🙂... continue reading

Foreign Business Activities in the USA Speeches, Publications, and Events
March 30, 2010 - Phil Hodgen

Outlook for commercial real estate investment

For our clients outside the United States who plan to buy commercial real estate (and I met with some of you on my recent trip to Singapore and Jakarta):

By the end of 2010, about half of all commercial real estate mortgages will be underwater, said Elizabeth Warren, chairperson of the TARP Congressional Oversight Panel, in a wide-ranging interview on Monday.

Banks and property owners are going to be under increasing pressure.  Prices will drop.

Do your preparation now.  Maybe test the market a little.  Get ready, get smart.

You don’t want to be setting up your business models (what do I buy?... continue reading

Foreign Business Activities in the USA US Real Estate Investments
February 9, 2010 - Phil Hodgen

Bravo House Ways & Means Committee for RSS

I was trolling through the House Ways & Means Committee website looking for hints of the existence of H.R. 4539, a new bill which significantly alters the taxation of nonresident investors in U.S. real estate.

To my utter shock, I found that our trusted servants have enabled RSS for Committee activity.

Bravo!

(If anyone else is interested in H.R. 4539, which was introduced on January 27, 2010, too bad. Nothing is there on the Ways & Means Committee’s website. Nor is there anything yet on the website for the Bill’s author, Rep. Joseph Crowley.)

And yeah. I’ll be writing something up for you on this proposed change to the tax laws.... continue reading

Foreign Business Activities in the USA Nonresidents with US Activities Speeches, Publications, and Events